These Hollywood Stars Made Huge Credit Card Mistakes, but We Don’t Have to
We often look in awe at celebrities. The work they do, the lives they live, it’s all so glamorous! But some celebrities make big credit card mistakes, and these are mistakes to be avoided. For a few examples to avoid, look at the details below.
Stephen Baldwin – Getting into too much debt
Famous actors earn much money, so it is assumed they can pay their credit card bills without issues. That’s not always the case. In 2009, actor Stephen Baldwin filed for bankruptcy in New York as he was deeply indebted due to two mortgages and back taxes, besides owing more than $70,000 on credit card debt. No matter how much you earn, spending lavishly always catches up with you. To avoid being indebted, keep these tips in mind:
- Make a budget for your monthly expenditure and avoid over-spending
- Monitor your expenses carefully
- Set up text/ email balance alerts to warn you
- If you overspend, switch to cash and put the card away
- Never default on your bills
Seth Myers and Amy Poehler – Credit Card falling into Wrong Hands
Former Saturday Night Live stars Seth Myers and Amy Poehler had dinner together in May 2014. They split the bill and Poehler accidentally walked out of the restaurant with Myers’ credit card. Poehler eventually returned the card after making a $5,000 donation to a charity. This incident happened between friends but if your credit card falls into wrong hands, Myers’ cavalier attitude is not to be followed. Instead, be sure to:
- Report the missing card to your issuer when you notice it’s missing, review your account activity online and warn the issuer about fraudulent charges. Federal law limits liability to $50 for fraudulent charges, which most card issuers ignore.
- Ensure that your issuer cancels your card and mails a new card.
- Monitor your account carefully to ensure that no additional sketchy charges are levied while all others are reversed
Lindsay Lohan – Maxing out your Card:
Celebrities too have embarrassing card moments and actress Lindsay Lohan, in August 2014, had her card declined when paying a $2,500 bar tab at a posh nightclub in New York. The reason she was unable to use her credit card isn’t clear, but it is possible that she maxed out and she should then worry about her credit score. Maxing out a credit card will damage 30% of her score determined by “amounts owed.” And if the bill is not paid in full by its due date, she will be liable for some hefty interest charges. To avoid maxing out your card and the humiliation of having it declined, follow these simple tips:
- Prepare a budget for your monthly dues and stick to the budget
- Monitor your expenditure carefully throughout the month
- If using more than 30% of your available credit, make immediate payments
- If unable to make a payment in time, switch to another card
Maintaining a close watch on how much money is entering into your checking account and how much is being spent; the golden card rule is not to charge more than you can afford to repay in one month. It is true that we can learn much more from celebrity credit card mistakes. Be sure to avoid their mistakes by following simple tips.
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